Portfolio Management Professional (PfMP)® Interview Questions

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Portfolio Management Professional (PfMP)® Interview Questions

As companies continue to grow and expand their operations, portfolio management has become an increasingly important function. The Portfolio Management Professional (PfMP) certification is designed to validate the skills and expertise of portfolio managers and is considered a prestigious credential in the field.

If you’re preparing for a PfMP® interview, it’s important to be well-versed in the key concepts and best practices of portfolio management. In this blog, we’ll cover some common interview questions that you might encounter, along with tips for answering them effectively. We’ll also provide some background on the PfMP® certification and what it entails.

Whether you’re a seasoned portfolio management professional or just starting out in your career, this blog can help you prepare for your next interview and demonstrate your knowledge and expertise in the field. So, let’s dive in!

About the exam:

This exam is intended to test a candidate’s ability to achieve the strategic objectives and priorities of the organization. Moreover, the candidates should be able to perform continuous analysis and monitoring of portfolio components to identify issues, risks, and opportunities for improvement. This exam challenges an individual to bring forward the best Portfolio Managers that serve as an asset to any company. Therefore, to help our users, we along with our experts have designed the most important Portfolio Management Professional (PfMP)® Interview Questions.

Now. let’s start with top-class PfMP Interview questions.

Advanced Interview Questions

Can you tell us about your experience in portfolio management and how you have used PfMP® principles in your role?

As a portfolio manager, I was responsible for overseeing a portfolio of projects and ensuring they were aligned with the organization’s strategic objectives. This involved making decisions about resource allocation, prioritizing projects, and managing risk. I found that the PfMP® principles were incredibly valuable in this role, as they provided a structured and systematic approach to portfolio management.

One of the key principles I applied was the definition and prioritization of projects. Using the PfMP® framework, I was able to define a set of criteria for evaluating projects and ranking them in terms of their importance to the organization. This helped me to ensure that limited resources were allocated to the most important projects, and that the portfolio as a whole was aligned with the organization’s goals.

Another important principle I applied was risk management. Using the PfMP® approach, I was able to identify potential risks associated with each project and develop contingency plans to mitigate these risks. This helped me to ensure that the portfolio was resilient and that projects were delivered on time and within budget.

Finally, I also applied the principle of continuous improvement. By regularly reviewing the portfolio and using data to inform my decision-making, I was able to make improvements to the portfolio management process and ensure that it remained effective and efficient.

Overall, the PfMP® principles provided me with a comprehensive and effective approach to portfolio management, and I found that they were instrumental in helping me to achieve my objectives as a portfolio manager.

How do you determine the strategic alignment of a portfolio of projects?

As a portfolio manager, determining the strategic alignment of a portfolio of projects requires a multi-step process that involves the following steps:

  1. Define the overall strategy: The first step is to clearly define the overall strategy of the organization, including its goals, objectives, and mission statement.
  2. Evaluate the projects: Next, evaluate each project individually to determine its goals, objectives, and how it aligns with the overall strategy.
  3. Assess the portfolio: Once the projects have been evaluated, assess the portfolio as a whole to determine if the projects are working together cohesively to support the overall strategy.
  4. Identify gaps: Identify any gaps or areas where the projects are not aligning with the overall strategy and assess their impact on the portfolio.
  5. Rebalance the portfolio: If necessary, make changes to the portfolio to realign it with the overall strategy. This may involve adding, removing, or reprioritizing projects.
  6. Regular review: Finally, regularly review the portfolio to ensure that it continues to align with the overall strategy and make any necessary adjustments.

By following these steps, a portfolio manager can ensure that the portfolio of projects is strategically aligned, supporting the overall goals and objectives of the organization.

How do you handle portfolio risks and how do you make risk-based decisions?

As a portfolio manager, I am responsible for managing the investment portfolios of my clients, so managing risks and making risk-based decisions is a crucial part of my job.

To handle portfolio risks, I follow a systematic approach:

  1. Identifying Risks: I regularly monitor the market conditions and assess the risks associated with the securities in my portfolio. I also consider the specific risks associated with each security, such as credit risk, interest rate risk, market risk, and liquidity risk.
  2. Assessing Risks: Once I have identified the risks, I assess their potential impact on the portfolio and prioritize them based on their likelihood and severity.
  3. Managing Risks: Based on my assessment of the risks, I decide on an appropriate risk management strategy. This may involve reducing exposure to high-risk securities, diversifying the portfolio, or using financial instruments such as options or derivatives to hedge against certain risks.
  4. Monitoring Risks: I continuously monitor the risks and adjust my risk management strategies as necessary.

To make risk-based decisions, I consider both the risk and the expected return of each investment. I carefully analyze the potential returns and risks of each security, taking into account the individual client’s investment goals and risk tolerance. I also consider the overall market conditions and the potential impact of macroeconomic events on my portfolio.

Ultimately, my goal is to strike a balance between risk and return, ensuring that my clients receive the best possible returns while minimizing their exposure to risk.

How do you prioritize projects within a portfolio and make decisions about resource allocation?

As a portfolio manager, my priority is to align projects with the overall strategic goals of the organization and to maximize return on investment. To prioritize projects, I would consider the following factors:

  1. Alignment with strategic goals: The first step is to ensure that each project aligns with the organization’s overall strategic goals. Projects that support the organization’s vision and mission should be given higher priority.
  2. Potential for return on investment: Projects that have a higher potential for return on investment (ROI) should be given higher priority. This can be measured by considering factors such as revenue potential, cost savings, and market demand.
  3. Risk assessment: Projects that carry a lower level of risk should be given higher priority. This can be evaluated by considering factors such as project complexity, dependency on external factors, and the impact on the organization’s operations.
  4. Available resources: Projects that require fewer resources, such as staff and budget, should be given higher priority.
  5. Time to market: Projects that have a shorter time to market should be given higher priority. This allows the organization to realize benefits sooner and respond more quickly to market changes.

Once the projects are prioritized, I would make decisions about resource allocation based on the priority and availability of resources. I would allocate resources to projects in a way that maximizes return on investment while minimizing risk. Additionally, I would regularly monitor and reassess the allocation of resources to ensure that the portfolio remains aligned with the organization’s strategic goals and the projects continue to meet their goals and objectives.

How do you measure the success of a portfolio and its individual projects?

As a portfolio manager, there are several key metrics I use to measure the success of a portfolio and its individual projects.

  1. Return on Investment (ROI): This is a fundamental metric that measures the financial return on an investment. It helps me determine if the portfolio is generating sufficient returns to justify its investments.
  2. Internal Rate of Return (IRR): This metric measures the efficiency of an investment by calculating the annual rate of return that is expected to be earned on a project.
  3. Net Present Value (NPV): NPV measures the difference between the present value of cash inflows and the present value of cash outflows. It helps me determine if a project is financially feasible.
  4. Cost Benefit Analysis (CBA): This helps me measure the benefits of a project compared to its costs. It helps me determine if a project is worth pursuing based on its expected financial returns.
  5. Project Schedule Performance: This measures the performance of the project in terms of meeting its planned schedule. I use this metric to assess if the project is being completed on time, or if there are any delays that need to be addressed.
  6. Customer Satisfaction: This measures the satisfaction level of customers with the project outcome. I use this metric to assess the impact of the project on the target audience.
  7. Risk Management: This helps me measure the success of risk management processes within the portfolio. It helps me assess if the risks associated with the portfolio are being effectively managed.

In conclusion, these metrics help me assess the overall performance of a portfolio and its individual projects, enabling me to make informed decisions about future investments.

Can you walk us through a recent portfolio review process you led and how you addressed any issues or challenges?

Recently, I led a portfolio review process for a large institutional investor with a diverse portfolio of equities, fixed income, and alternative investments. The goal of the review was to assess the performance of each investment, identify any underperforming assets, and make recommendations for rebalancing the portfolio to align with the investor’s long-term investment objectives.

The first step of the review was to gather and analyze data on the performance of each investment. This involved reviewing financial statements, market trends, and other relevant information. The data was then used to create a detailed performance report for each asset class, which was reviewed by the investment committee.

Based on the results of the performance analysis, the investment committee identified several underperforming assets that were not meeting their investment objectives. To address these challenges, we held several meetings with the fund managers to discuss their investment strategies and to identify any areas of improvement.

In some cases, the underperformance was due to market trends that were affecting the entire industry, while in others, it was due to specific issues with the investment itself. In these cases, we made recommendations for rebalancing the portfolio to reduce exposure to underperforming assets and to increase exposure to more promising investments.

Finally, we held an investment committee meeting to review the final recommendations and to make a final decision on any changes to the portfolio. The decisions were based on a combination of factors, including the performance of each asset class, market trends, and the investment objectives of the investor.

In conclusion, the portfolio review process was a thorough and collaborative effort that helped us to identify areas for improvement, make informed decisions, and ensure that the portfolio was aligned with the investor’s long-term investment objectives.

How do you ensure effective communication and collaboration among stakeholders within a portfolio?

I believe effective communication and collaboration are critical to the success of a portfolio. Here are some steps I take to ensure this:

  1. Define Communication Channels: I establish clear communication channels with all stakeholders, including regular meetings, email updates, and phone calls. This helps keep everyone informed and connected.
  2. Assign Roles and Responsibilities: I make sure that everyone involved in the portfolio knows their role and what is expected of them. This helps to avoid confusion and ensures everyone is working towards the same goal.
  3. Establish a Portfolio Governance Process: A portfolio governance process outlines the decision-making process, who is responsible for making decisions, and how stakeholders can provide input. This helps to ensure that everyone is aligned and that all decisions are made in a transparent and equitable manner.
  4. Foster a Culture of Collaboration: I encourage a culture of collaboration and open communication by promoting teamwork and encouraging stakeholders to work together. This helps to build trust and ensures everyone is working towards the same goal.
  5. Use Technology: I leverage technology to support collaboration and communication. For example, I may use project management tools to track progress, share updates, and provide real-time feedback.

In conclusion, effective communication and collaboration are key to the success of a portfolio, and it is my responsibility as a portfolio manager to ensure this is a priority. By defining communication channels, assigning roles and responsibilities, establishing a governance process, fostering a culture of collaboration, and using technology, I can ensure that all stakeholders are working together to achieve our portfolio goals.

Can you give an example of how you have balanced short-term and long-term portfolio goals?

As a portfolio manager, I understand the importance of balancing both short-term and long-term portfolio goals. This can be achieved by having a well-diversified portfolio that is tailored to meet the specific investment objectives of each client.

For example, one of my clients had a short-term goal of generating a steady stream of income from their portfolio. To achieve this goal, I allocated a portion of their portfolio to high-yield bonds and dividend-paying stocks. These investments provided a stable and consistent income stream, which met the client’s short-term needs.

However, the client also had a long-term goal of growing their portfolio over time. To meet this goal, I also allocated a portion of their portfolio to growth-oriented investments such as technology and healthcare stocks. These investments had the potential for high growth over the long-term and helped to balance out the short-term focus on income generation.

By balancing short-term and long-term portfolio goals, I was able to help my client achieve their investment objectives in a risk-controlled manner. This allowed them to reach their financial goals in a responsible and sustainable manner.

How do you keep up with industry trends and incorporate new methodologies into your portfolio management practices?

As a portfolio manager, I believe that staying updated with the latest industry trends and incorporating new methodologies is crucial to staying ahead in the market and achieving better returns for my clients. Here are some of the steps that I take to keep up with industry trends and incorporate new methodologies into my portfolio management practices:

  1. Attend Industry Conferences and Workshops: I regularly attend industry conferences and workshops where I can network with my peers, listen to expert speakers and get updated on the latest market trends, investment strategies and technology advancements.
  2. Read Relevant Literature: I subscribe to industry publications, investment newsletters, and academic journals to stay updated on new developments in the financial world. This allows me to keep abreast of the latest research and insights in portfolio management.
  3. Network with Peers: I maintain a strong network of peers, both in my organization and outside, who I can exchange ideas with and learn from. This helps me to gain new perspectives on the latest trends and best practices in the industry.
  4. Utilize Technology: I leverage technology tools such as risk management software and portfolio optimization models to enhance my investment decision-making process. I regularly attend training sessions to learn about new technologies and how to best utilize them.
  5. Keep Learning: I am always eager to learn and continuously update my knowledge and skills by attending online courses and workshops. This helps me to better understand and incorporate new methodologies into my portfolio management practices.

By following these steps, I am able to stay updated with industry trends and incorporate new methodologies into my portfolio management practices to ensure the best outcomes for my clients.

Basic Interview Questions

1. What is portfolio management, and why is it important?

Portfolio management is the process of selecting, prioritizing, and managing a group of projects, programs, and other initiatives to achieve specific strategic goals and objectives. The purpose of portfolio management is to ensure that organizations are investing their resources (time, money, and people) in the most effective and efficient way possible, while also ensuring alignment with the organization’s overall strategic direction.

Portfolio management is important because it allows organizations to:

  • Align projects and programs with strategic goals and objectives: By managing projects as a portfolio, organizations can ensure that individual projects and programs are aligned with the organization’s overall strategy.
  • Maximize the return on investment (ROI): By selecting the right mix of projects and programs, portfolio managers can maximize the ROI of the organization’s resources.
  • Manage risk: Portfolio management enables organizations to manage risk at the portfolio level, rather than on a project-by-project basis.
  • Prioritize resources: Portfolio management enables organizations to prioritize resources, ensuring that the most important and impactful projects and programs are funded and resourced appropriately.
  • Monitor and measure performance: Portfolio management enables organizations to monitor and measure the performance of the portfolio as a whole, as well as individual projects and programs, using metrics and KPIs to track progress and identify areas for improvement.

2. What are the techniques required to collect project requirements?

The major techniques required to collect project requirements are as follow:

  • Conduct stakeholder analysis to identify who should be involved in the requirements gathering process.
  • Use various methods such as interviews, surveys, focus groups, and brainstorming sessions to collect requirements.
  • Use visual aids such as flowcharts, diagrams, and prototypes to help stakeholders understand the requirements.
  • Document and validate requirements with stakeholders to ensure that they are complete, accurate, and achievable.
  • Use a requirements traceability matrix to track the requirements throughout the project lifecycle.

3. What is SWOT analysis?

One effective tool used to support decision-making processes is the SWOT analysis, which can help to withstand scrutiny from stakeholders while enabling the identification of lucrative opportunities. By analyzing the strengths, weaknesses, opportunities, and threats associated with a project, stakeholders can make informed decisions about their portfolios, ensuring that their investments are strategic.

4. Expand and explain RTM?

Another crucial tool used in the validation process is the Requirements Traceability Matrix (RTM), which is a document that connects requirements throughout the project life cycle. The primary objective of the RTM is to ensure that all system requirements are tested in the test procedures, and no needs are overlooked. This approach helps teams to avoid any potential gaps or misunderstandings that could result in unsatisfied stakeholders or delays in project delivery.

5. What are the initiatives that you will take for risk planning?

  • Conduct a risk assessment to identify potential risks and their likelihood and impact.
  • Develop a risk management plan that outlines how risks will be identified, analyzed, and managed throughout the project.
  • Assign responsibilities for risk management to specific team members.
  • Develop contingency plans to mitigate the impact of high-risk events.
  • Regularly review and update the risk management plan to ensure its effectiveness.

6. List some examples of motivation theories and formal techniques?

  • McGregor’s Theory
  • Vroom’s Expectancy Theory
  • McClelland’s Theory
  • Hertzberg’s Theory
  • Lastly, Maslow’s Theory

7. Define Decision making in an organization?

In the decision-making process, there are several steps involved, including identifying the decision, acquiring information, and evaluating potential solutions. These steps play a critical role in helping decision-makers to make appropriate choices and take actions that align with the organization’s objectives.

8. What are the 7 decision-making steps?

  • Identify the decision
  • Gather relevant information
  • Identify the alternatives
  • Weigh the evidence
  • Choose among alternatives
  • Take action
  • Lastly, Review your decision & its consequences

9. What does MoSCoW stands for?

The MoSCoW approach is another valuable tool that categorizes projects into four types: Must-haves, Should-haves, Could-haves, and Will-not-haves. This classification helps teams to prioritize projects and determine which ones are essential and which ones can wait, ensuring that their resources are allocated effectively.

10. What do you understand by gap analysis?

Gap analysis is a method used to evaluate the performance of a business’s information systems or software applications to ensure that business requirements are being met. By identifying gaps, stakeholders can take steps to resolve issues and ensure that their investments are successful. In summary, these tools and approaches are invaluable for ensuring the success of any project, program, or operation.

11. How does organizational structure achieve the organizational aim?

  1. Clarifies roles and responsibilities for individuals and teams.
  2. Facilitates communication and collaboration between departments and teams.
  3. Provides a framework for decision-making and problem-solving.
  4. Ensures that resources are allocated effectively to achieve organizational goals.
  5. Facilitates the implementation of processes and procedures to improve efficiency and effectiveness.

12. What is the use of the governance model?

The governance model helps define the work and authority of its committees and frames how committees communicate and report their efforts to the board and management team. Governance models build the authority that presides over compliance, risk, legal, finance, and audit matters.

13. What are the three steps in the Portfolio management process?

The three steps in the portfolio management process are:

  • Strategic alignment: Identify the strategic goals and objectives that the portfolio is intended to achieve.
  • Portfolio analysis: Assess the portfolio’s current state, including its composition, performance, and risks, and identify areas for improvement.
  • Portfolio management and optimization: Develop and implement strategies to optimize the portfolio, such as balancing the portfolio, prioritizing projects, and managing risks.

14. Define change request?

A change request is a formal proposal that seeks to modify a particular product or system. It is a legal document that sets out the request for change and is an essential part of any project baseline. Change requests, commonly referred to as “CR”, are a crucial aspect of the project management process, as they ensure that any modifications made to the product or system are done so in a controlled and transparent manner.

15. List the different types of change requests?

  • Major change.
  • Standard change
  • Minor change
  • Lastly, Emergency change

16. List the Aligning process group processes that are applied to portfolio components?

  • Component Identification
  • Characterization
  • Evaluation
  • Selection
  • Prioritization
  • Portfolio Balancing
  • Lastly, Authorization

17. Risk in portfolios occurs at two levels. Explain?

The risk in portfolios occurs at two levels: the component level and the portfolio level.

  • Component-level risk should be considered as a component criterion to be included in the Evaluation, taken into account for Prioritization and Portfolio Balancing, and then managed at the component level.
  • Portfolio-level risks are any unpredictable events or conditions that could affect the intentions or constraints that govern the portfolio such as Strategic Objectives and Governance. They should be identified, addressed, etc. during the Portfolio Planning phase, monitored and controlled at regular portfolio status reviews, and reassessed.

18. What do you know about performance reports?

Performance reports are an integral part of project management, as they help to track the progress of the project and evaluate its overall performance. These reports are generated to provide stakeholders with an accurate representation of the project’s current state, and to compare its actual performance against predefined benchmarks. By monitoring and analyzing project performance through regular reports, stakeholders can gain insight into the areas where the project is performing well, as well as identify areas that may require improvement.

19. What are the different types of performance reports?

  • Progress report
  • Status report
  • Forecast report

20. How to ensure efficient and effective communication?

  • making your message understood
  • receiving/understanding the intended message
  • Lastly, by exerting some control over the flow of communication.

21. List some techniques to communicate effectively with Project stakeholders?

  • Ambiguity Reduction
  • Assertiveness
  • Confrontations
  • Seeking Information
  • Let Others Speak
  • Silence
  • Wrap Up
  • Lastly, Non-Verbal

22. List five distinct steps in effectively managing a change process?

  • Defining the change objective.
  • Developing a strategy and plans to achieve that objective.
  • Creating a project management group to effect the change.
  • Installing a control process to monitor progress.
  • Managing the project by implementing the above four steps.

23. List the major strategies that must be taken into account?

  • The political environment
  • Financial requirements (such as funding)
  • The complexity of the change
  • Technical complexity
  • Contractual relationships and potential penalties
  • Geographical factors (isolation, spread, etc.)

24. The management group for any change process divides into three subgroups. Name them.

  • The independent project manager
  • The independent planning and control group
  • Lastly, Functional groups.

25. What types of control data are required in nearly all change situations?

  • Technical
  • Schedule
  • Cost
  • Lastly, cash requirements.

26. What do you understand by OD? List some of its applications.

Organizational Development (OD) techniques can help people plan for and adapt to organizational change. OD skills are formed principally from psychology and small group theory. OD can support by:

  • Providing a common language for helping individuals view interpersonal behavior
  • Increasing motivation by getting people to work better together and building team spirit
  • Explaining the process of organizational change that is happening or will occur, and
  • Helping individuals and groups resolve specific problems.

27. What do you mean by Stakeholder Analysis?

Stakeholder analysis typically refers to the range of techniques or tools to identify and understand the requirements and expectations of major concerns inside and outside the project environment.

28. What do you understand by Portfolio?

A collection of projects or programs or other work arranged together to promote efficient management of work to meet decisive business objectives. The projects or programs of the portfolio may not certainly be interdependent or directly related.

29. Define a Category?

A planned key description is used to gather potential and approved components to facilitate further decision-making. Categories normally link their components with a common set of strategic goals.

30. What is a SubPortfolio?

A SubPortfolio is a grouping of components inside a bigger portfolio that comprises programs, projects, portfolios, and other activities.

31. What does a Stakeholder register include?

A stakeholder register is a vital tool in project management, as it serves as a repository for information about the interest and power of various stakeholders. It is a comprehensive database that includes details such as their level of engagement, communication preferences, and expectations. The register is a dynamic document that is continuously updated throughout the project lifecycle, as new stakeholders are identified and their details are added to the register. By maintaining a stakeholder register, project managers can effectively manage and engage with stakeholders, ultimately helping to ensure the success of the project.

32. What is Portfolio Balancing?

Portfolio balancing holds the primary benefits of portfolio management, that is, the faculty to plan and allocate resources according to strategic direction, and the ability to maximize portfolio return within the organization’s predefined desired risk profile. The major purpose of this process is to include the portfolio component mix with the greatest potential, to collectively support the organization’s strategic initiatives and achieve strategic objectives.

33. What does a risk management plan include?

  • List of possible risk sources and categories
  • Impact and probability matrix
  • Risk reduction and action plan
  • Contingency plan
  • Risk threshold and metrics

34. What happens when risks are analyzed?

Once the risks are identified, they are analyzed to identify the qualitative and quantitative impact of the risk on the project so that suitable steps can be taken to mitigate them.

35. List some of the Perceptual factors?

  • Familiarity
  • Manageability
  • Proximity
  • Lastly, Propinquity

36. What is the use of Escalations?


  • Provide a check-and-balance mechanism to help ensure proper action
  • Resolve problems early
  • Help reduce failure among project members
  • Improve overall productivity by reducing rework
  • Help prioritize work activities
  • Encourage employee assistance and problem ownership

37. How to Manage Compliance in a Project?

  • Consider compliance as a requirement: this method allows the project team to document early any element of the regulation that points to the addition of elements to the work breakdown structure (WBS). The benefit of this approach is those standard elements are incorporated into the scope of the project and therefore can be determined efficiently until completion.
  • Consider compliance as the process assets of the organization: the concept allows organizational process assets to be considered an input for a large majority of the 42 processes are well known to project managers. Apparently, this covers the rules, regulations, or standards affecting the products or services offered by the organization.

38. What do you understand by Demand management?

Demand management is the process an organization puts in place to internally collect new ideas, projects, and needs during the creation of a portfolio.

39. List the three risk categories?

  • Operational risks
  • Short-term strategic risks
  • Long-term strategic risks

40. What are Short-term strategic risks?

Short-term strategic risks are defined as the risks that are related to the objectives for the project owner’s use of the project results after the project has been completed. It may also mean the risk for first-order effects of the project, that is, the risk for the effects that should be achieved for the target group or users.

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